Dealing With Competition

With anyone who starts a new business, you are likely to have some competition.  Clearly, there are some cases where this isn’t going to happen.  For example, if you are starting a business in an industry with no companies, yet even in this situation you will probably eventually have competitors.  But dealing with markets where there are companies who do what you do, you’re going to have competition.

This freaks a lot of people out.  I know when I started, I didn’t want to know what any of my competitors were doing.  I was like… no!  I need to focus on myself.  But if it you look at what was really going on, I was insecure.  I was afraid that I would look at them and see they were doing phenomenally and then I would be depressed.  So I used it as a rationalization for myself.  “I don’t care!  I’m not interested in what anyone else is doing.”  However, in the beginning, it was the opposite.  I would read their sites every day to see what they were doing.  I knew everything about them.  I didn’t want to bypass any information at all.

So something you have to deal with is the fact that other people do what you do.  I would like to write another post on this in the future about how to address this question, for example when a likely client comes up to you and asks what makes you different from this other company.  That’s a good question, but I can’t really address any psychology behind it in this post.

What you need to consider though is paying attention to what they are doing.  What is important is that, if they have any details you need to study, that you are aware of them.  One thing to notice is if they are changing anything that might have some effect on you.  For example, maybe you and everyone else in your industry have approximate pricing.  Let’s say you have a product and you charge $150 for it.  The other companies in your industry charge about the same thing.  Then one day, one of them drops their price to $120.  Theoretically, this might result in increased business for them which means they are taking some of your market share, which is bad news for you.  But you might not be aware of this, you might just think, did something happen?  Why am I getting fewer sales.

You later find out this other company lowered their price.  A-ha!  How could you have known?  Well, one option is to monitor their website.  You probably don’t want to do this every day, but there are tools available that track changes to website content, so this allows you to know what other people are doing but you don’t have to check it yourself.  It’s pretty helpful with businesses where you need to do this.